Trade Alert: three moves to lock in profits
18th February 2021 |
I’ve been reviewing our positions in the portfolio.
Looking at every position from top to bottom and asking the question, stay or leave.
In my view, it’s time to take some profits off the table from a few positions and reduce our overall buy list size. Today, three are getting the chop.
This won’t please everyone. In fact, some people may completely disagree with these decisions. However, as I’ve said before, the hardest thing to do in investing is to take profits off the table. There’s always a lingering question, “Will it go higher?”
Well, conversely, there’s always the possibility it will go lower. It all depends on the view of the stock, and whether or not it’s achieved a result as expected in the timeframe expected.
First up, Akoustis Technologies Inc (NASDAQ:AKTS),
Akoustis has been in the portfolio for just on 15 months. In that time it’s delivered a great gain of 84.42%. A couple of weeks ago it traded as high as $18.50 but has since seen a sharp fall back.
I want to protect the gains it’s made, as I believe that the US tech sector is getting overheated. And that we will start to see some wild volatility in the market. While it’s part of an important industry in 5G, the initial target was $16 in 12 months. It achieved that, and hindsight says that’s where we should have exited.
An 84.42% gain in just over a year is the result we were looking for. It’s job done with Akoustis so we exit the position.
Action to take: SELL Akoustis Technologies (NASDAQ:AKTS)
The second is Livent Corporation (NYSE:LTHM).
There was a bit of a scare much like Akoustis just a few weeks ago when Livent traded up over $24 and then sharply fell around 25% closer to $18.
Admittedly I was close to making this decision then. My take on it is that while it’s easy to get caught up in pure-play lithium companies, there will be better growth in other areas related to green energy. Particularly around battery storage and battery development outside of the use of lithium.
It would be easy to assume that a world of electric vehicles (EVs) means lithium demand will only continue. I believe that to be a fallacy. More efficient and effective technology, new alternative technologies, I believe will end up see lithium demand plateau.
We’ve got a tidy profit on the table of over 76.73% and it’s profit worth taking off the table and cashing in.
Action to take: SELL Livent Corporation (NYSE:LTHM)
Finally, Oxford BioMedica (LSE:OXB).
From the time Oxford BioMedica came into the buy list up until March 2020 the stock was heading in one direction. Down.
But out of the back of the impact on the market from lockdowns and coronavirus, Oxford BioMedica has seen a resurgence in the stock price. It’s now trading at highs not seen in over a decade.
I see this as a by-product in interest and investor excitement of the overall biomedical industry off the back of the pandemic. My view is that a number of stocks may very well see that fade away through 2021.
I see it as a prudent time to take more profits off the table for a stock that has seen a positive outcome on its stock price off the back of a global pandemic that is now starting to see an end in sight.
Action to take: SELL Oxford BioMedica (LSE:OXB)
I’ve also been tossing up what to do about our recommendation in our sole crypto in our buy list, IOTA. It has gone on a massive tear in the last couple of weeks.
The whole crypto market has.
My view is that these are long-term plays. Long term as in really a five year plus idea. What is being developed is massive. It’s world changing. That’s why we now bring you Sam Volkering’s Crypto Network, it’s why IOTA is in our buy list.
Considering the rise in fiat price and considering my view long term for IOTA’s importance in a world of machine-to-machine (M2M) communications, as well as its progress towards a massive event in the public launch of Coordicide (which you can read about more in the current IOTA report), I’ve decided to lift the buy limit on IOTA.
That means for now I’m opening IOTA back up as a BUY recommendation and to accumulate IOTA at current prices and continue to accumulate up to $3.61.
At that price IOTA would have a circulating “market cap” around $10 billion.
That might seem huge, but in relative value compared to some of the world’s listed public companies, I see that as still being a value worth buying up to considering how much potential IOTA has.
If you’re new to crypto and IOTA and want to get some, I suggest making sure you read the report on it here and the “Ultimate Starters Guide to Crypto” here.
Two new reports available in your members’ section
Just a quick FYI too.
If you want to get clued up about the booming crypto market…
I’ve just put together two new crypto related reports available for you in your Frontier Tech Investor log in.
The first is called, “How to spot and avoid crypto scams”.
The second is a “best hits” of sorts directing you to my favourite resources about the crypto market.
It’s called “Crypto Treasure Chest”.
Stock Focus
Marston’s – Marston’s announced last week the private equity firm that had looked to buy it out (which it rejected) had withdrawn from the process completely. This sent the stock sharply down almost 17% in intraday trading last Friday. As noted when I wrote about the bids that did come in, Marston’s knows its value. And in my view that’s closer to prices we saw in December 2019. We’re not there yet, but the stock continues to head in the right direction.
WANdisco – WANdisco is a stock that’s been chugging along for the last year. It spiked hard from last year’s market crash and then as traded down from there. Its trading update from January suggested the company is still making significant progress and expects that the 2021 year will be markedly better than 2020. For now we persist with the stock, expecting that from here it has potential this year to move up a gear and build on the small gain it’s currently showing. Under its buy limit price, the stock remains a buy recommendation.
Warpaint London – After what would be considered to be a tough year for retail in 2020, Warpaint has actually come out of things rather well. It had stronger than expected trading in the second half of the year and expect to report a profit from operations for the whole year, when it releases results in April. With even more expansion in Tesco stores, and of course the world moving past Covid-19, things continue to look up for Warpaint as it continues to slowly move forward and build on the gains made so far.
The Frontier Tech Investor Top Three
Sometimes it’s hard to decide on which stocks to invest in from our buy list.
Below is our Frontier Tech Investor “Top Three” section showing three stocks in open BUY positions that if you’re trying to figure out what to invest in next, are the three we think are a great place to start.
This doesn’t mean our other stocks are no good, it’s just a guide to help you out in your decision-making process for the next stock we think is worth your consideration.
MelodyVR – Melody VR is a part of the global music streaming industry. Primarily, its MelodyVR app is for virtual reality music streaming. This includes live concerts. I call it the Spotify of VR. The potential is huge. And having recently acquired Napster, a good old throwback to yesteryear, looking to rename and grow their offering, I think there’s great potential in this still relatively unknown company.
IQE – Our most recent recommendation, IQE, is a key part of the supply chain getting semiconductors into the world. With a gigantic increase in the demand for semiconductors, the world is facing a “chipageddon”. It’s a situation where there simply aren’t enough semiconductors to supply the world’s biggest most demanding companies. IQE is one of the few ways to pure-play the world’s semiconductor industry in the UK market.
Velocys – there’s no doubt that governments are going to continue to push their “green agenda”. This means doing what they can to support industry that will help enable carbon neutral economies. Velocys is a big part of this, developing sustainable fuels for transport and logistics (in particular aviation) with pioneering technology. If you’re looking for a great “green energy” play, Velocys is a great place to start.
Regards,
Sam Volkering
Editor, Frontier Tech Investor
